EIH Ltd Q1 FY27 Earnings Analysis

- Revenue growth drivers for FY27-FY28 primarily focus on increasing average room rates (ARR) due to limited addition of new room keys in owned hotels during this period. - Improving profitability by eliminating waste and optimizing cost structures without compromising guest experience or hotel maintenance. - Managed hotel additions are expected to pick up beyond FY28, with a larger pipeline in FY29-FY30. - Continuous renovation and new hotel openings (e.g., Trident Vizag in 2027) will contribute to growth. - Domestic business growth is expected to offset challenges in international travel, aided by changing demographics favoring luxury segment demand. - FY26 saw room revenue of ₹1,216 crores and F&B revenue ₹670 crores from owned hotels, showing a solid base. - Despite geopolitical and pandemic-related challenges, industry fundamentals remain strong with historical RevPAR growth around 8-10%. - No explicit management revenue growth guidance given; analysts expected to model growth based on detailed hotel-level data.

- Revenue growth in the next 3-5 years was not specifically quantified by management; analysts are expected to model this based on hotel-level data (Page 15). - Key growth drivers up to FY28 include: - Focus on driving average room rates (ARR) due to stable inventory in FY27 (no significant new keys until FY28) (Page 8). - Cost optimization by eliminating waste rather than broad cost cuts to maintain service quality (Page 8). - Some margin improvement expected in FY27 due to normalization after one-time impacts (like wage code impact and Mashobra) affecting FY26 (Pages 5 and 8). - EBITDA growth was modest at 3% in FY26 due to business mix effects; expectation is for better margins as these normalize (Page 5). - Management confident in achieving or outperforming projected rates and occupancies, supporting stable earnings growth (Page 18). - Managed hotel project slippages may affect near-term growth but no significant risk to overall profit trajectory (Page 15).

- FY26 Capex was approximately ₹680-700 crores. - Major spends included: - Mumbai land conversion to freehold: ~₹330 crores. - Oberoi Rajgarh Palace operationalization: ₹125 crores. - Ongoing renovations across Kolkata and other properties: ~₹100 crores. - Remaining capex was for replacements. - Future capex guidance: - Expected to remain in the ₹600-700 crore range for the next 1-2 years. - Capex will increase significantly towards FY29-30 with bigger hotel projects coming online. - Renovation pipeline includes: - Trident Nariman Point: renovation on 4 floors staggered over lean months to minimize operational impact. - Oberoi Bengaluru: renovation of ~90 rooms. - Rajgarh Palace is a key operational addition with expected profitable outlook aligned with luxury leisure hotels. - Some project delays due to site redesigns (e.g., Oberoi Gandikota shift to 2030).

- There is no specific mention of any current or future fundraising through debt or equity in the transcript from the Q4 & FY26 Result Webinar. - The company discussed capital expenditure plans, with around ₹600-700 crores being spent annually on capex for the next one to two years, increasing towards FY29-30, but did not indicate raising funds to finance this. - The CFO and MD highlighted strong cash flow from operations (₹993 crores) and a healthy cash balance (₹1,335 crores) as of March 2026, suggesting internal funding capabilities. - No direct references or plans regarding issuance of new debt or equity were disclosed during the Q&A session or presentation.

- The development pipeline includes adding 825 keys to owned hotels by 2030, starting with Trident Vizag in 2027 (via EIH Associated Hotels). - For managed hotels, 24 hotels with 1,893 keys are planned, mostly domestic with some international additions. - Some delays have occurred in management contracts due to owner-related factors, causing slippage in hotel openings, notably pushing some projects to 2029 and 2030. - The owned hotel projects are generally on schedule, with updates shared in presentations. - Renovations are planned for several existing hotels in FY27, including: - Approximately 90 rooms at Oberoi Bangalore, - Upgrading F&B at Trident Bandra Kurla, - Renovation of 4 floors each at Trident Nariman Point and Oberoi Bombay. - Two additional management contracts signed recently for Trident hotels in Amritsar and Pawna (~150 keys each), added to the pipeline.